SEATTLE — May 23, 2006 — Speaking today at the Microsoft Windows Hardware Engineering Conference (WinHEC) 2006, Microsoft Corp. Chairman and Chief Software Architect Bill Gates announced the immediate availability of beta 2 versions of Windows Vista™, the 2007 Microsoft® Office system and the next version of Windows Server™, code-named Windows Server “Longhorn.” It is the first time that Microsoft has simultaneously released the test versions of all three of the company’s flagship products.

Speaking before a nearly sold-out crowd of over 3,500 hardware technologists and business planners, Gates outlined a vision for the future of the PC and hardware devices. He demonstrated how Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn” will drive innovation across the industry and support the rich ecosystem of hardware manufacturers that continue to expand choices for customers in everything from computers to peripherals to mobile devices and entertainments systems.

“The release of these three betas is a significant milestone for Microsoft and a major step toward delivering the platforms that will drive the next decade of computing,” Gates said. “The combination of these innovative platform technologies and the new hardware and software being developed by our partners will make PCs and other devices more powerful, more useful and more intelligent for businesses today and into the future.”

The Platform for the Next Decade of Business Computing

In his keynote address, Gates formally delivered the first beta 2 copies of Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn” to a representative of Chevron Corp. Chevron is one of many customers conducting early deployment and testing on all three platforms to hundreds of desktops and servers.

Business customers worldwide will find tremendous value in deploying the products together. As the world of digital business information grows exponentially, businesses look to software advances not just to manage the influx of this information, but also to accelerate the effectiveness and impact of their people. Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn” are designed to help businesses empower their people to manage waves of information and contribute to bottom-line success in four key areas:

Simplifying how people work together. Wherever people work in an organization, these three products will make it easier for them to communicate and work together in teams and with their external customers and partners. The products include collaboration capabilities that enable workers to more easily share, access and synchronize information and documents across a wide range of devices.

Enabling better content protection and management. Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn” are designed to streamline everyday business processes and compliance procedures that slow people down. The products include capabilities that enable better protection and retention of user and system data, as well as improved application of compliance policies and business process integration with critical business systems.

Finding information and improving business insight. Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn” enable people across organizations to have faster, easier access to critical information and the tools that help them derive better insight from this information. The products include new tools for finding information across a range of applications, on desktop PCs and on mobile devices, while also extending business insight with new business intelligence tools.

Reducing IT costs and improving security. Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn” cut down deployment and management costs and complexity by reducing security risks and simplifying the deployment process. The products include capabilities that help IT professionals better manage operations, while also delivering enhanced protection from Web-based malicious software and fraudulent e-mail messages. In addition, the products include capabilities that enable companies to deploy a single operating system image, and streamline the deployment and customization of software updates.

“Chevron employees in over 180 countries use a standard set of Microsoft products for business productivity,” said Alan Nunns, general manager of information technology and strategy for Chevron, which is deploying and testing on all three products. “With the next generation of the Windows platform, we will leverage the new capabilities of Windows Vista, the 2007 Microsoft Office system and Windows Server ‘Longhorn.’ The new platform is an important part of our integrated plan to improve the management of information across our enterprise. The energy business is a knowledge-intensive business. Our people need great tools and processes to gather information and collaborate so that they can make the best business decisions.”

Windows Vista Beta 2 and Windows Server “Longhorn” Beta 2 are available now to developers and IT professionals with MSDN® and TechNet subscriptions, as well as to members of the Technology Adoption Program (TAP) and the TechBeta program. In coming weeks, Microsoft will start the Windows Vista Customer Preview Program (CPP) to allow developers and IT professionals who are not a part of those programs to obtain the code and begin their own testing. Also as part of the CPP, Microsoft will invite a broader group of technology enthusiasts to receive a build of the operating system to begin testing the various consumer scenarios that Windows Vista enables. WinHEC attendees will receive DVDs of the Windows Vista and Windows Server “Longhorn” Beta 2 releases. The 2007 Microsoft Office system Beta 2 is available via free download in English, French, German, Japanese and Spanish languages at http://www.microsoft.com/office/preview.

Gates highlighted how the close alignment of software, services and hardware development creates an industry dynamic that enables innovation and offers customers greater choice. As demonstrated in his keynote address today, Windows Vista and Windows Server “Longhorn” will open up new segments of market opportunities in PC-based computing in which the industry and Microsoft ecosystem partners can innovate for the next 10 years. Gates called out the incredible advances being made in PC form factors in the areas of connectivity, mobility and performance based on the next-generation Windows® platform and how the industry will continue to drive these scenarios forward.

In addition to the vast hardware opportunities enabled with the release of Windows Vista, the 2007 Microsoft Office system and Windows Server “Longhorn,” Microsoft today outlined several new opportunities for hardware partners to take advantage of services across the Windows Live™ platform. Today Gates announced that Motorola, a global leader in communications technologies, will launch a cordless, dual-mode phone in the U.S. later this year, and he discussed the growing opportunity to design devices that work with live services — going well beyond voice over Internet protocol (VoIP)-enabled phones.

“As the cordless system evolves into a central hub for the communications needs of families, Motorola is bringing advanced services such as VoIP right to the handset. Microsoft’s support for hardware developers enables us to make the great voice features of Windows Live Messenger accessible in new, innovative connected home devices,” said Barry James Folsom, Motorola corporate vice president and general manager of home mobility solutions. “By unleashing messaging from just the PC, the Motorola T31 with Windows Live can make consumers’ in-home communications experience more convenient and more mobile.”

Gates also announced plans for Microsoft to release a beta version of a Windows Live software development kit (SDK) this summer, to enable partners to develop devices — ranging from webcams to headsets — that work with live services either through the PC or directly through the Windows Live network. More information about hardware development for Windows Live services can be found at http://dev.live.com/hardware.

Encouraging Industry to Test WinFX Beta 2 and Go-Live License

Today Microsoft is also announcing the beta 2 version of WinFX® and the corresponding Go-Live license, both available to developers on MSDN. WinFX is a core part of the Windows Vista operating system that enables developers to rapidly build modern applications that feature visually stunning user experiences, seamless and secure communication, and resilience to change.

The Go-Live license also includes the first Go-Live license for Windows® Presentation Foundation and enables customers to deploy applications for Windows Vista using any or all of the key technologies of WinFX — Windows Presentation Foundation, Windows Workflow Foundation, Windows Communication Foundation and “InfoCard,” the code name for a technology designed to simplify and improve the safety of accessing resources and sharing personal information on the Internet — before the final release of WinFX.

Other News Discussed Today at WinHEC

Gates also shared new details on the Windows Server virtualization front. Microsoft’s hypervisor-based solution is on track to be available with the upcoming Windows Server “Longhorn” operating system. Microsoft anticipates having a beta release of Windows Server virtualization by the end of 2006 and plans to release to manufacturing (RTM) within 180 days of Windows Server “Longhorn” RTM. More information on Windows Server virtualization is available.

During his keynote today, Gates also discussed plans to make personal computing more accessible by offering customers in emerging markets a pay-as-you-go program, called Microsoft FlexGo™. More information on Microsoft FlexGo is available.

About WinHEC

In its 15th year, the annual Windows Hardware Engineering Conference provides an opportunity for industry professionals who want to stay aligned with Microsoft’s platform road map and new market opportunities. WinHEC is a must-attend event for hearing the Windows story end to end, featuring practical information to help hardware designers and manufacturers.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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